Did you apply for a personal loan and were you suggested to take out insurance?

This is credit protection insurance that is not mandatory, but is advisable, as it represents additional security for the consumer. Credit protection insurance can protect against a loss of income caused by illness, unemployment or the death of the insured, allowing the insured to continue to pay the instalments.

However, the list of restrictions and requirements to activate the coverage of this insurance is so extensive that, in the end, few consumers are able to benefit from the security advertised.

What should you consider before hiring?

Before deciding to take out a policy, the consumer should be familiar with the policy and only then decide whether to take it out or not. The clauses in the policies contain a list of restrictions and requirements for activating the coverage, which is so extensive. We would like to point out that there are many restrictions and requirements, which in practice means that not all policyholders will be able to benefit from the promised financial security.

Therefore, the consumer must inform himself about the conditions of the insurance contract, namely:

• Grace period, that is, the time that elapses between the start date of the contract and the date on which the coverage and guarantees can be activated;
• Minimum duration of the event (inability to work, hospitalization, unemployment) required to be able to activate the insurance;
• Maximum compensation period for each coverage;
• Limit value defined for each coverage;
• Payment method, some credit insurance policies require full payment at the time of contracting;
• Policy exclusions, i.e. what is not covered by the insurance. For example, see whether the coverages are applicable to your professional situation and whether situations of incapacity for work are not included;
• Conditions for terminating the contract.

What does credit protection insurance cover?

In general, the insurance covers situations of incapacity to work due to illness or accident and involuntary unemployment (normally only for employees). It can also cover the risk of hospital admission due to illness or accident, in the case of self-employed workers.

Get in touch with us .

Count on DECO MADEIRA's support by calling 968 800 489/291 146 520 or by emailing [email protected] . You can also schedule an appointment via Skype. Follow us on social media: Facebook, Twitter, Instagram, Linkedin and Youtube!